Recordkeeping Tips for New Businesses

Maintaining good recordkeeping is vital in allowing business owners to present accurate financial information and to track their income, expenses and cash flows. Additionally, quality recordkeeping provides easy access to supporting documents for all transactions. One of the best practices in ensuring your company’s transactions are recorded correctly is reconciling all its bank accounts on a monthly basis.

The bank reconciliation process matches the transactions on the bank statement to those in the accounting records. Both sets of records should match. If they don’t match, then the next step is to determine the discrepancies and fix them. The difference could be from a payment that was processed by the bank but not recorded in the books. Or it could be caused by a bank error where the cleared check shown on the bank statement did not match the actual check amount. These errors are easier to address shortly after they occur, so it is good practice to complete a bank reconciliation each month. The bank reconciliation should be completed before you close the books or prepare any financial reports.

Having a good accounting system in place can make the recordkeeping process seamless and efficient. For example, many accounting software options, such as QuickBooks, provide a way to link a company’s books to its bank accounts. With this feature set up, any bank or credit card transaction will be automatically entered into the accounting system. The system may also allow you to set up codes for common vendors so that recurring transactions (rent, utilities, subscriptions, etc.) are always recorded to the appropriate account.

As a business grows, it may prove difficult to manage the volume of its transactions without putting additional systems in place. One such option is BILL, which is an online software application that many clients use to manage accounts payable, accounts receivable, and credit card payments. This application can be integrated with many common accounting software packages such as QuickBooks, Sage Intacct, Xero, Oracle NetSuite, and Microsoft Dynamics. In doing so, any invoice or payment processed within BILL will be synchronized to your accounting software. Effectively implementing these strategies allows for easy review of transaction recording and will be most helpful when it comes time for the company’s financial statements to be audited.

We have helped many startup and emerging clients navigate through these processes and implement the necessary systems, and we are always happy to answer any questions you may have along the way.